AmazonScience/document-haystack

1Chief Executive’s review22023 was far from a straightforward year, but 3it was an important and necessary one for the 4business. We can now look to the future having 5removed several long-term uncertainties and 6delivered market expectations, while also 7having progressed our Customer Value 8Strategy (CVS) and more firmly pointed 9the business towards our digital audiences.10Much of this progress was several years 11in the making, for example the preparation 12that supported us in 2023’s trial around several 13long-standing historical legal issues. While 14confronting the past in this way is not easy, the 15resulting judgment on time limitation for future 16claims around historical legal issues means 17that a significant number of outstanding 18claims can be resolved, and this should 19largely bring an end to future claims.20We also took decisive action to resolve the 21outstanding pension funding valuations, which 22has similarly given us a firm end in sight for an 23obligation that has hindered this organisation 24for several decades. Together these two 25achievements give the business much-26needed financial clarity and allow us to 27plan for the future with far greater certainty.28Throughout the year, we made significant 29progress in becoming a data-driven, digitally-30focused business, supported by a predictable 31and reliable print business.32The average revenue (RPM) we generate from 33our digital page views is now up over 10% from 34last year, not something I take for granted 35against a challenging backdrop. While we 36have seen yields decline in our open market 37programmatic advertising, we have been 38able to add increased value by growing 39non-advertising revenue streams like 40ecommerce, affiliates and partnerships, 41reinforcing the benefit of our Customer Value 42Strategy (CVS). Crucially this has reduced the 43impact from the industry-wide decline in 44referral traffic, a trend that we have long 45expected – albeit not as quickly and severely 46as it came – and which CVS was always 47intended to mitigate.48We continued our transformation in the year, 49taking action to ensure that our cost base 50reflects the economic environment in which 51we operate, and to enable us to become 52a digital-first organisation. To achieve this, 53we needed to reduce the size of some of 54our teams. This is not a decision I or my 55management team take lightly. However, 56recent trends have only reinforced our belief 57that we must be willing to make big changes 58to exert more control over our own destiny 59and protect our brands in the long term.60The strong yield performance and efficient 61management of our cost base meant we 62delivered a sustainable operating margin of 6317%, broadly in line with last year and giving 64us a strong foundation for 2024.65A fast-changing environment66We operate in a dynamic, competitive and 67constantly evolving market and 2023 was no 68exception. The period of economic volatility 69that began in 2020 has continued to impact 70the market, placing pressure on advertising 71spend and inflating costs for both businesses 72and consumers. Throughout the year, our 73entire industry saw a fall in referral traffic 74from tech platforms and we were not immune 75from that. Facebook, one of our largest traffic 76referrers, has shifted away from news content 77and we have contended with numerous 78Google core algorithm updates, each one 79requiring us to pivot on how we deliver 80content to our audiences.81These changes have impacted our organic 82search traffic and therefore our growth in the 83near term, with page views down 24% versus 84last year, in line with the wider news publishing 85market. Despite the decline in volume, our 86commercial teams have expertly traded 87the value of our content and ad space, 88capitalising on our Customer Value 89Strategy progress to drive our revenue.90Telling the stories that matter91It’s clear that audience behaviour and digital 92trends can shift rapidly, but what remains 93constant is our core purpose to enlighten, 94empower and entertain our mainstream 95audiences, wherever they might find us. 96A PATH TO 97PROGRESS98Jim Mullen99Chief 100Executive 101Officer102“We can now look to the 103future having removed 104several long-term 105uncertainties and 106delivered market 107expectations.”10812109Reach plc Annual Report 2023Strategic Report Governance Financial Statements Other Information110The secret kitchen appliance is a "microwave".